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9 marksActivity-Based Costing (ABC)

CAPE Accounting Unit 2 · 2017 · Paper 2 · Question 2(a)(ii)

Peyton Manufacturing provided estimated overhead costs and activity driver levels (setup, maintenance, inspection) for the next financial year, along with direct costs and driver usage for job XYZ (600 units). Overheads are currently applied using direct labour hours (capacity of 100 000 direct labour hours).

Calculate the unit cost for job XYZ using activity-based costing.

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Other parts of this question

  1. 2(a)(i)Name and describe ONE costing system, other than activity-based costing, which may be used to cost job XYZ.[4 marks]
  2. 2(b)(i)Prepare the income statement for 2016 using marginal costing.[8 marks]
  3. 2(b)(ii)Prepare the income statement for 2016 using absorption costing.[10 marks]
  4. 2(c)Explain the difference between 'absorption costing' and 'marginal costing'.[4 marks]

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